Lonmin rejects higher pay demand, promises new approach

JOHANNESBURG (Reuters) - Lonmin, due to resume talks on Monday with strikers at its Marikana platinum mine in South Africa who rejected a pay rise offer last week, insisted it could not meet the workers' demands but promised a new approach in labor relations.

Acting Chief Executive Simon Scott said the deaths at the mine of protesters, 34 of whom were shot dead by police on August 16, had been a 'wake-up call' for the company and it was committed to ending the five-week labor unrest in which a total of 45 people have been killed.

In an opinion piece published in the Sunday Times newspaper, Scott said Lonmin would improve discussions with strikers although it could not afford to meet their higher wage demands.

"For Lonmin, the starting point is to acknowledge that our company must go through a process of self-reflection," Scott said.

"What I can promise is that we are committed to playing our part. We have had our wake-up call, as has the rest of South Africa."

"Clearly, one of the issues we need to reflect on is how we find balance between protecting the business, and the jobs dependent upon it, on the one hand and how we respond with sensitivity to the complex situations that Lonmin is at the center of," Scott said.

On Friday workers at the mine dismissed the company's offer as way below the 12,500 rand ($1,500) a month sought by members of the militant Association of Mineworkers and Construction Union (AMCU), which is challenging the influence of the more established National Union of Mineworkers (NUM).

UNREST SPREADS

The dispute at Marikana has been at the heart of unrest, in which a total of 45 people have been killed, that has spread through the platinum sector in South Africa, the world's top producer of the metal, rattling Africa's biggest economy.

The labor unrest has also highlighted a power struggle within the country's ruling African National Congress (ANC).

ANC rebel Julius Malema has seized on it to return from the political wilderness, urging strikers to make mines "ungovernable".

South Africa's elite police unit, the Hawks, said it was investigating a case against Malema, opened by trade union Solidarity early this month, of incitement of violence and intimidation.

"That case has been referred to us and we are currently investigating," Hawks spokesman MacIntosh Polela said.

"We are not going to narrow it to Marikana. We are just going to look for evidence of this incitement, aspects of it are going definitely to be Marikana."

The rand fell 3 percent on Wednesday as the unrest engulfed Anglo American Platinum, the biggest miner, and ripples began to reach the bond market.

On Friday police fired teargas and stun grenades to disperse another group of striking miners at an Aquarius Platinum plant.

Scott, who has been acting chief executive while Ian Farmer has been on sick leave since last month, reiterated the company's position that a 12,500 rand monthly wage would put thousands of jobs at risk and challenge the viability of the business.

The company is offering increases of between 9 percent and 21 percent.

In a statement on Sunday it denied a report by NUM that it had improved its key offer to rock drill operators, who are at the centre of the unrest.

NUM said on Saturday Lonmin had raised the offer to these workers from an earlier proposal of 900 rand, but the company said it had already been offering them a rise of over 1,800 rand a month, excluding bonuses.

The price of platinum, used in jewelry and vehicle catalytic converters, has risen more than 20 percent since the Marikana shootings amid fears of disruption to supplies.

Even though the Lonmin wage offer was rejected, its shares rose 5.5 percent on Friday on the back of another jump in the platinum price following the announcement of U.S. economic stimulus measures.

Lonmin has said its talks are to resume at 0800 GMT on Monday.

(Reporting by Olivia Kumwenda; editing by David Dolan and Anthony Barker)